Economic evaluation of water supply systems operated with solar-driven electro-chlorination in rural regions in Nepal, Egypt and Tanzania

Abstract

Reliable data on the economic feasibility of small-scale rural water supply systems are insufficient, which hampers the allocation of funds to construct them, even as the need for their construction increases. To address this gap, three newly constructed water supply systems with water points in Nepal, Egypt, and Tanzania were accompanied by the authors throughout the planning and implementation phases and up to several years of operation. This study presents an analysis of their economic feasibility and suggests important factors for successful water supply system implementation at other rural locations. The initial investment for construction of the new water supply systems ranged from 23,600 € to 44,000 €, and operation and maintenance costs ranged from 547 € to 1921 € per year. The water price and actual multi-year average quantity of tapped water at each site were 7.7 €/m³ & 0.67 m³/d in Nepal, 0.7 €/m³ & 0.88 m³/d in Egypt and 0.9 €/m³ & 8.65 m³/d in Tanzania. Although the new water supply systems enjoyed acceptance among the consumers, the actual average water quantity tapped ranged from just 17 to 30 % of the demand for which the new supply systems were designed. While two of three sites successfully yielded a cash surplus through the sale of water, sufficient for operation, maintenance and basic repairs, no site showed a realistic chance of recovering the initial investment (reaching the break-even point) within the projected lifetime of the technical infrastructure. Reaching the break-even point within 5 years, which would be necessary to attract private investors, would require an unrealistic increase of the water price or the water consumption by factors ranging from 5.2 to 9.0. The economic viability of such systems therefore depends strongly on the quantity of water consumed and the water price, as well as the availability of funding from governments, NGOs or other sponsors not primarily interested in a financial return on their investment.